It is one of those rare occasions when a straightforward deal of $4.2 billion creates a $119 billion jump in the combined market value of both the buyer and seller.
Hertz Global Holdings Inc. on Monday ordered 100,000 Tesla Inc. vehicles. The value of this order caused 28 times to jump of the sale value to the company’s market value. The deal had a cascading impact on the company shares and a particular shareholder as well.
As per Bloomberg news, the deal of 100,000 electric vehicles is one of the largest ever purchases in the automotive sector’s history and indeed the first-ever for electric cars. Hertz is spending $4.20 billion at an average cost of $42,000 per car. The mind-boggling announcement pushed Tesla Shares by more than 12 %. It increased the market capitalization of its shares to nearly $118 billion.
The Trillion Dollar Club
The developments on Monday made Tesla join the trillion-dollar elite club as its fifth member. Tesla has now become the fifth most valuable company traded on the stock markets in the U.S. On Monday, it closed at 1024.86 USD gaining 115.18 dollars in a single day.
The Deal
The biggest surprise was the deal between Hertz, a car rental company going bankrupt recently, and Tesla. The order pushed Tesla into the trillion-collar club even as Tesla CEO Elon Musk tweeted that Hertz had plenty of demand for vehicles.
The more surprising development was that though Hertz was the buyer of the EVs, its share gained $1.17 billion in market value after the announcement. It was an unusual change of circumstances for a company valued at less than $ 8 billion for most of the summer.
Elon Musk’s gift in the mouth has solidified his position as the world’s richest man. His net worth got boosted by $ 36.2 billion in a single day after this deal. According to Bloomberg Billionaires Index, his net worth is now at $288.6 billion.
